At stake: The 2018 Super Bowl would be Minnesota’s chance to show off the state and the new stadium before a global audience.

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Minnesota legislators weigh Super Bowl tax breaks

Article by: Baird Helgeson

Star Tribune

March 24, 2014 - 7:38 AM

A tax relief package designed to lure the Super Bowl to Minneapolis is running up against the limits of bipartisan zeal for cutting taxes at the Capitol this year.

DFL Gov. Mark Dayton met recently with legislative leaders from both parties to press his case, and cautioned against a partisan fight that could doom the state’s Super Bowl bid.

“Life will go on if we can’t keep this out of the partisan politics,” Dayton said. “We’ll just have to let the opportunity go by.”

Under consideration is roughly $10 million in tax breaks for gameday player salaries, NFL Super Bowl events and even tickets to the big game, which can reach $2,600 for the best seats.

Hanging in the balance is a once-in-a-generation opportunity to showcase the state and the new $1 billion Vikings stadium before an international audience totaling hundreds of millions. State leaders must weigh it all against the political consequences of handing out tax breaks to the National Football League and potentially some of the nation’s most highly paid athletes.

Minneapolis is competing against Indianapolis and New Orleans for the right to host the 2018 Super Bowl. With the final pieces of the old Metrodome coming down, stadium officials face a deadline to put together a proposal by next month. A decision is expected in May.

“The new stadium is a significant component in analyzing Super Bowl bids, but that alone won’t deliver it,” said Lester Bagley, Vikings vice president of stadium development. “If the public sector is not fully on board, it won’t work.”

Boosters are touting the potential economic impact of the event at well north of $300 million. Some independent economic studies put the ­benefits at less than $100 million, still an intoxicating ­windfall during the sluggish winter months.

Dayton and legislative leaders express at least a willingness to consider the tax breaks, but many rank-and-file members of the Legislature are far more apprehensive, particularly in an election year.

A matter of priorities

“No, no, no,” said Sen. David Osmek, R-Mound. “Why should we be giving tax breaks to millionaires and billionaires when we can’t fill potholes in Minnesota?”

Osmek said the NFL gins up the competition and then works community leaders into a frenzy over who can offer more.

“The NFL is playing us all against each other,” he said. “Why can’t Minnesota be the first one to get off this train and say, ‘Stop?’ If the Super Bowl wants to come to Minnesota, then you pay the same taxes as Joe Taxpayer in Minnetonka.”

The proposal scrambles the usual partisan dynamics around the Capitol, with Republicans speaking stridently against the kind of tax breaks they usually embrace and Democrats open to tax relief for the multibillion-­dollar NFL.

House Taxes Committee Chairwoman Ann Lenczewski said she hopes legislators move past the divisive fight over the new stadium, which pulled together one of the most politically diverse and fragile coalitions in recent history.

“People need to think about this a little differently, now that the stadium is approved,” said Lenczewski, DFL-Bloomington. If the economic benefits can be proven, “it probably warrants some help,” she said.

One major snag for many legislators is the proposed tax break for players’ gameday ­salaries.

“If you are an NFL player, and you get to go to the Super Bowl, are you not going to come if your income taxes aren’t exempted that day?” Lenczewski asked. “That one would be off the table, for me personally.”

To sidestep a nasty election-year fight, legislative leaders increasingly favor signing a letter to the NFL vowing to work it out before the game. That’s the approach state leaders have used for other high-profile events, such as the Republican National Convention.

Legislators are weighing taxpayers’ investment as community leaders are preparing to commit to raising roughly $30 million to bring the event to Minnesota.

The Twin Cities last hosted the Super Bowl in 1992, and community leaders are eager to showcase the area again.

A net plus for Indiana

Michele Kelm-Helgen, chairwoman of the Minnesota Sports Facilities Authority, spends her days poring over economic studies and data from other Super Bowls and has come to her own conclusion: The tax breaks are worth it.

A recent study of the economic impact of the 2012 Super Bowl in Indianapolis showed that the state took in an additional $39.9 million, even after all the tax breaks it provided to host the event.

“It is going to bring in ­significant tax revenue,” she said.

Dayton noted that if local communities had any misgivings about the overall economic benefit, New Orleans and Indianapolis would not be fighting so hard to get it back. “It’s a very good deal,” he said.

Dayton acknowledged that passing the tax relief package is probably out of reach in an election year.

Experts who study the economic impact of Super Bowls remain deeply skeptical about the sky-high predictions.

Lost in the hoopla over the highly touted benefits, they say, is a list of unaccounted-for costs, like additional law enforcement, preparation and cleanup.

Robert Baade, an economics professor at Lake Forest College, said much of the reported economic impact is for player salaries, souvenirs and other money that leaves the community after the game.

Oftentimes, the hassle of the event drives away people who would have visited the city otherwise. Studies show that this year’s Super Bowl resulted in disappointing occupancy rates for hotels in New York and New Jersey.

“When you consider all of that, the economic evidence is significantly muted, or close to zero in some instances,” Baade said.